Steps to become debt free
If you need to get out from under high interest rate debt(creditcard or otherwise),
you can follow these easy steps:
- Get a low interest rate loan or creditcard
with low or no balance transfer fee. If you have a fee, make sure that the savings
in interest is more than the fee.
- Pay off the high interest rate debt(s). Cancel and cut-up any associated creditcards
- Put any of the low interest rate creditcards and checks in your safe or safety deposit
box(or anywhere safe, so you aren't carrying them around.)
- Get a rebate card and use it for new
purchases. Write each charge in your checkbook, maybe in red, and don't spend more
than you have.
- Pay off your rebate card each month. The preferable way to do this is to have the
full amount automatically deducted from your checking account each month. Since
you've recorded all your charges and haven't allowed your balance to go below
your minimum, you will always have enough in the account.
- Large emergency expenses that would exceed the amount available in your checking account
can either go on your low rate card directly, or if you don't have a balance transfer
fee, through your rebate card and transferred to the low rate card.
- Use the interest savings and rebates to pay off the remaining highest interest rate
card, starting over at step 2.